Attorney says he did not misappropriate funds

By Katie Hansen - Daily News Staff

Published: Wednesday, May 22, 2013 at 02:06 PM.

In the affidavit of surrender, he submitted his resignation, Coxe said, because “I know that if disciplinary charges were predicated upon the misconduct under investigation, I could not successfully defend against them.”

Coxe maintains that he himself did not personally mismanage any funds.

“The bar has not found any evidence,” he said. “There’s nothing to support that I misappropriated funds.”

Coxe has 30 days after the entry of the order of disbarment to “wind-down his law practice.”

His current clients were assigned new representation, and Coxe confirmed that most of his clients will now be represented by his son, Matthew Coxe.

“Like 99 percent of them,” he said. “They were more than willing to stay with that office; there was no mass exodus. My son’s a very competent lawyer and I’ve always done very well by my clients.”

Superior Court Judge Charles Henry advised Coxe’s clients in criminal superior court on how to proceed following his disbarment.

A Jacksonville attorney disbarred by the North Carolina State Bar says that he did not commit the misappropriation of funds that led to his disbarment.

Leon Robert Coxe III of Jacksonville was disbarred by the Wake County Superior Court after state officials say more than $120,000 in trust was misappropriated and another $150,000 was “borrowed” from a settlement fund, according to a notice on the state bar website.

The notice states that Coxe turned in his law license after admitting that $123,689 from his trust account was used for to pay his employees’ salaries and for business and personal expenses, according to the order. Coxe said that his wife, who had a prior history of trust account mismanagement, managed the funds and had transferred the misappropriated money, according to the state bar. According to the state bar, “Coxe also admitted that he ‘borrowed’ $150,000 from settlement funds owed to a client without the client’s informed consent, without advising her to seek independent counsel, and without providing her a reasonable opportunity to do so.”

On Tuesday, Coxe told Daily News Staff that he was approached by someone in his office in March 2009 about problems with the funds.

“The truth is important,” Coxe said in an interview Tuesday. “This is all started when I contacted the bar and said, ‘I have a problem.’

“I found out there was misappropriation of funds and I contacted the bar. I have been working with them for four years. I have cooperated with the bar 100 percent.”

Coxe said he willingly surrendered his license, because he had to take responsibility for the mismanagement of funds, even if he did not commit the acts himself.

“I was responsible for this happening, because I let other people manage the accounts,” he said.

According to the consent order of disbarment, signed on March 20, 2013, the bar found that Coxe borrowed money from a trust belonging to his legal assistant, whom he had represented in a personal injury matter, to deal with a shortage in another trust account.

Coxe asked “to borrow $150,000 of her settlement proceeds” from an accident in which she was recovering from brain injuries but did not reflect on whether his assistant “could fully understand the implications of making a loan to him or provide informed consent,” according to the document.

At the time the order was signed, Coxe had not returned the funds to his assistant, the report stated.

Coxe signed an affidavit of surrender of his law license on March 1 and tendered his resignation “freely and voluntarily.”

The affidavit of surrender, stated in Coxe’s words, said that from January 2008 to February 2009, entrusted funds to which Coxe was not entitled “were used to pay my employees’ salaries, business and/or personal expenses.”

“I had known since 2004 that my wife had previously mismanaged entrusted client funds held in these accounts,” Coxe wrote in the affidavit of surrender. “Despite this knowledge … I continued to abdicate to my wife responsibility to protect my clients’ entrusted funds…”

In the affidavit of surrender, he submitted his resignation, Coxe said, because “I know that if disciplinary charges were predicated upon the misconduct under investigation, I could not successfully defend against them.”

Coxe maintains that he himself did not personally mismanage any funds.

“The bar has not found any evidence,” he said. “There’s nothing to support that I misappropriated funds.”

Coxe has 30 days after the entry of the order of disbarment to “wind-down his law practice.”

His current clients were assigned new representation, and Coxe confirmed that most of his clients will now be represented by his son, Matthew Coxe.

“Like 99 percent of them,” he said. “They were more than willing to stay with that office; there was no mass exodus. My son’s a very competent lawyer and I’ve always done very well by my clients.”

Superior Court Judge Charles Henry advised Coxe’s clients in criminal superior court on how to proceed following his disbarment.

“So far I have not heard of one that might not have gotten replaced, but it appears to me that all the cases he had in criminal superior court, all the individuals were given new representation,” Henry said. “My understanding is that they have been provided with new counsel.”

Henry said Coxe’s clients in district court were advised by the district court on how to seek new counsel.

Leanor Hodge, the deputy counsel and petitioner for the disbarment case, said a reprimand issued to Coxe in 2009 for failing to “hold a deed at issue in a suitable place for safekeeping” and failing to “promptly deliver the deed when requested” by the buyer, was not connected to the current situation.

In a separate action, the bar suspended the license of Jacksonville attorney Victor H. Morgan Jr. for three years after a random audit uncovered trust account deficiencies but no evidence of misappropriation, according to the disciplinary notice from the bar. Morgan can apply for a stay of the remaining 18 months after serving 18 months of active suspension, according to the notice.